Changes at Borders call attention to Internet competition

Music and movie lovers may have noticed some changes at Borders Books and Music lately. Borders stores are clearing out slow-moving CDs and DVDs by selling them at discounts as high as 50%. It will now focus mostly on new releases and maybe other bestsellers in each category.

This should come as no surprise. CDs, in particular, have seen their sales decline as sales of online music have risen. Movie sales have faced competition from venues ranging from Target and Wal-Mart to Blockbuster, all of which sell similar titles.

This scenario presents some interesting challenges for the book side of Borders’ business. With growing polarity of Kindle devices that can download thousands of available book titles, the question is whether stores like Borders will need as much space now for actual books.

Granted, the shift to online books may take years if it happens at all.

Still, furniture retailers should take notice. As more and more furniture is for sale online, more people may start buying it there. True, they will likely go to a store first where they can see, touch and/or sit on the product. But once they do, the store could easily lose the sale to an online vendor - unless it has a Web strategy that allows the consumer to purchase it on its store own Web site.

This is the new reality of consumer buying patterns, and one that companies like Drexel Heritage and its parent, Furniture Brands International, are sensitive to. It’s part of the idea behind Drexel’s recently launched e-commerce pilot program, which offers product for sale in certain ZIP codes on the Drexel Web site.

How this pans out will depend on a number of factors. But at least the company is aware of the challenge it faces from other Internet-based suppliers and is working on a strategy to keep the customer that wants to buy online.

What is your company doing to remain competitive on the Internet?